US-UK trade: Basham discusses American attitudes to deal
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Prime Minister Boris Johnson promised that joining the “mighty” Pacific trading block “will mean lower prices on our supermarket shelves”.
It is a glimmer of good news for the country after it emerged householders could face energy bills of £6,000 next year as the cost of living crisis worsens. Mr Johnson and Foreign Secretary Liz Truss said the deal – which could boost exports by £18billion – should result in lower prices.
International Trade Secretary Anne-Marie Trevelyan said businesses can start counting down to Britain joining the bloc, whose members have a combined GDP of £9trillion. Negotiations are due to conclude by the end of the year. Champions of the deal say it has a “key role to play in mitigating inflation and tackling the global cost of living crisis”.
Mr Johnson said: “Thanks to our top-notch trade negotiators and brilliant British businesses, the UK is on the way to becoming the first new country to join the Trans-Pacific Partnership.
“Becoming a member of this mighty trading bloc, which stretches from Canada to Japan, will mean lower prices on our supermarket shelves and will open up a market of almost half a billion people for British businesses.
“And the best news is, it’s just the latest of over 70 trade pacts we’ve forged with countries around the world. Every day we’re using our new-found freedoms to create more choices for people at home and expand the horizons for British exporters overseas.”
Winning membership of the trading bloc – formally known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – would be a major early success for a Liz Truss administration, and follows her work as International Trade Secretary.
She said: “As Prime Minister I would make accession to the Trans-Pacific Partnership a top priority. I put the UK at the front of the queue as Trade Secretary, and I will double down as Prime Minister to ensure that our economy can continue to benefit from increased trade across the world.
“This will create huge opportunities for our businesses to boost their exports to some of the fastest growing markets on the globe. And it will help keep prices on the shelves low for consumers too, through increased choice and competition.”
Ms Truss added: “Joining the Partnership will put the UK at the centre of a growing partnership of like-minded economies, strengthening our and our allies’ hands against an increasingly assertive China on the world stage. This is a perfect example of the type of benefit that Brexit offers our country and I intend to grasp it with both hands.”
The CPTPP has been signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The Government stressed its negotiators are “making sure we take the time needed to ensure we accede on terms that work for the UK’s interests and domestic priorities”.
Last month representatives of the CPTPP members met with UK counterparts in Tokyo and the next round of negotiations will take place at the start of October. International Trade Secretary Ms Trevelyan encouraged businesses to prepare for the chance to engage with a market of around 500million people.
She said: “It is one of the most exciting, high-value trade blocs in the world and businesses in every part of the UK can start counting down to some of the immense opportunities on offer for them once we become a member.
“We could see an £18billion boost in UK exports to CPTPP countries, thanks to tariff-free trade between members. The wins will not only be felt by our fine goods exporters, such as whisky distilleries and carmakers, but also as a global services superpower.
“Our world-leading tech and financial services companies will also benefit hugely from modern data rules in the partnership.”
It is hoped UK exports to the CPTPP could increase to £75billion by 2030. Membership would mean 99.9 per cent of UK exports would be eligible for tariff-free trade with CPTPP members.
A spokeswoman for Tory leadership contender Rishi Sunak applauded the potential of the CPTPP but cautioned against rushing negotiations, saying: “Outside the European Union we have the opportunity to strike trade deals around the world – and as someone who backed and believed in Brexit Rishi is committed to doing so.
“The CPTPP is an excellent opportunity for sectors across the United Kingdom but we must take the time to negotiate properly and ensure that all sectors are treated fairly.”
Among those excited by the prospect of Britain joining the bloc is Andy Street, Mayor of the West Midlands. He said: “Forging stronger trade links around the world is vital for the UK – and indeed for the region I represent – if we are to thrive in a post-Brexit environment.
“[The] prospect of supercharging our local efforts with a central government-led international trade deal is music to my ears as we seek new pastures for growth and bounce back post pandemic.”
Britain’s automotive industry, which employed more than 160,000 people in the UK in 2019, stands to receive a major boost. Last year car exports to CPTPP countries were worth £2.2billion. Whisky exports to the CPTPP nations – which last year came to £812million – are also expected to go up.
Ian McKendrick, of the Scotch Whisky Association, said: “Exports of Scotch Whisky to the CPTPP countries have grown significantly in the past decade, and the CPTPP has the potential to open up new opportunities for Scotch Whisky and other UK products in key markets in the region.”
John Longworth, a former director-general of the British Chambers of Commerce who today chairs the Independent Business Network, hopes membership will both “create wealth” and “reduce the cost of living”.
He said: “The Trans-Pacific deal not only connects us with our Commonwealth cousins in Australia, New Zealand and Canada but also some of the fastest growing, wealthiest and most innovative economies in the world: Singapore, Korea and Japan for example.
“Britain is a centre of high tech engineering, biotech and AI, and also a major provider of services including finance, which we can export. Importing cheaper goods and food will benefit the UK reducing inflation and the costs for people and business.
“Free trade is good; it drives efficiency through competition and innovation by specialisation. In short, the Trans-Pacific Pacific provides huge opportunities for us to develop trade and collaboration which will create wealth and jobs for the people of Britain and reduce the cost of living.”
Elizabeth Dunkley, of the Centre for Policy Studies, described membership as an “exciting opportunity for Global Britain”.
She said: “As well as being one of the world’s largest free trade areas, it slashes red tape and eliminates on close to 100 per cent of tariffs, helping to super charge trade, jobs and growth opportunities for UK businesses and consumers.
“[It] has the potential to boost GDP by an initial £1.8billion a year, which could reach £20billion as CPTPP expands. Businesses, exporters and consumers across the whole of the UK stand to benefit from the cost savings and efficiency gains that CPTPP membership will bring.
“Membership gives British firms greater flexibility in how they structure their supply chains making them more diverse and in turn more competitive and resilient with the added impact of reducing prices.
“By lowering these barriers and facilitating free trade, CPTPP has a key role to play in mitigating inflation and tackling the global cost of living crisis.”
Andy Burwell, the international director of the CBI, set out why British businesses will welcome the new opportunities CPTPP membership would unlock.
He said: “In an increasingly divided and competitive world it is essential that the UK champions free trade and builds robust partnerships for the future.
“CPTPP is recognised for its liberal trade policy and the countries within the bloc will be important economies as industry look to diversify supply chains and provide the cost, choice and quality that customers and consumers expect.
“The CBI will continue to work with Government and wider stakeholders to ensure that negotiations reflect UK strengths and values and support businesses to embrace the opportunities across the world.”
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